INTEREST RATES: Figures indicate economy could be slowing

* A drop in existing-home sales may be a sign of interest rate effects.

WASHINGTON - The U.S. economy surged ahead at a rapid 5.4 percent rate in the first three months of the year but growth may be slowing. Existing-home sales dropped 6.2 percent in April, a sign that the Federal Reserve's interest rate increases are beginning to bite.

The January-through-March increase in the Commerce Department's gross domestic product, the nation's total output of goods and services, was slightly bigger than many analysts expected but matched the government's estimate from one month ago. It followed the fourth quarter's 7.3 percent rate of growth, the best showing in nearly 16 years.

On Wall Street, stocks - little affected by Thursday's GDP report - tumbled. Financial stocks plummeted on fears that the stock market's continuing weakness will hurt their profits. The Dow Jones industrial average fell 211.43 points to close at 10,323.92. The Nasdaq lost 65.26 points to finish at 3,205.35.

In a second report, existing-home sales last month took their biggest dive since January. They fell to a seasonally adjusted rate of 4.88 million, the National Association of Realtors said.

An upswing in mortgage rates helped account for the decline, which appeared worse than it really was because March's sales were revised sharply upward, economists said.

More Reading...

A bleak economy is seen by private economists as a prod toward new Federal Reserve action to cut interest rates. The action may be delayed however, until debt refinancing by the U.S. Treasury concludes Thursday. By Martin Crutsinger AP Economics Writer WASHINGTON (... [Read More...]

WASHINGTON (AP) - Sales of new and existing homes both dipped slightly in February, but demand remained strong as housing continued to demonstrate few adverse effects from the slowdown in the overall economy. Sales of new single-family homes fell by 2.4 percent last month ... [Read More...]

WASHINGTON (AP) - Feeling prosperous, Americans pushed up sales of existing homes in February after two consecutive months of declines caused in part by higher mortgage rates. Sales of existing single-family homes bounced back by a modest 6.7 percent last month to a seasonally ... [Read More...]

WASHINGTON (AP) - Americans pushed existing home sales to a record high last month as they scrambled to lock in the best deals to beat slowly advancing mortgage rates. June sales of existing single-family homes jumped 10.6 percent to a seasonally adjusted annual rate ... [Read More...]